Raffles Education at 8-year low after rights issue plan

Shares of Raffles Education Corp Ltd fell to an eight-year low after the Singapore education services provider announced a rights issue plan and a net loss of $59.3 million for the financial year ended June.

Raffles shares fell as much as 8.1 per cent to $0.34, the lowest since August 2004. More than 2 million shares changed hands, 2.2 times the average full-day volume over the past 30 days.

"There is some concern about dilution because of the rights issue, and their main business seems to be facing a lot of difficulties," said a trader.

Raffles said late on Monday it plans to issue up to 170.9 million rights shares at $0.14 each, on the basis of one rights share for every five existing shares held by certain shareholders.

The company also announced last week that it swung to a net loss of $59.3 million for its 2012 fiscal year from a net profit of $13.2 million a year earlier.

Raffles expects its business in China to continue being affected by challenging operational conditions in the country. Its operations in Vietnam had also been suspended, the company said.